A bid by Best Buy Co. founder and former chairman Richard Schulze to take the struggling electronics chain private has been greeted by a wave of skepticism in the market.

On Monday, Mr. Schulze, who holds 20.1 per cent of Best Buy stock, said he would offer to buy the shares he doesn’t already own for $24 to $26 apiece, which values the entire company at $8.2-billion to $8.9-billion. As a result, the company’s stock price jumped more than 13 per cent on Monday but closed at $19.99 – below the proposal, which represents a premium of 36 to 47 per cent above Friday’s closing level.

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“I think there are lots of reasons for doubt” over the informal offer, said Bradley Thomas, retail analyst at KeyBanc Capital Markets. “It’s a tough one.”

Best Buy has struggled with weak results amid an upheaval in the electronics retailing field as Amazon.com and other online retailers sell products at a discount, stealing business from conventional chains such as Best Buy. Sales have dropped in seven of the past eight quarters at stores open at least a year. – a key measure for retailers.

The company has also faced its own internal pressures, which prompted former chief executive officer Brian Dunn to leave in April following a probe that alleged he had engaged in improper conduct.

The retailer’s current executives are racing to revive the business by slashing costs, closing stores and beefing up its cyber-selling, but the efforts haven’t stopped the relentless expansion of online giants such as Amazon.com and Apple. Now Mr. Schulze’s latest attempt to reinvent the Best Buy business may face its own obstacles.

Mr. Schulze, who stepped down from the board of directors in June, isn’t a newcomer to grappling with Best Buy’s challenges.

He founded the retailer under the name Sound of Music in 1966, and plans to finance his deal through a combination of about $1-billion of his own equity, private equity investment and debt. He hasn’t finalized his debt financing but said Credit Suisse, his financial adviser, has told him it is highly confident it can make the necessary arrangements. And he said he has talked to past executives who are interested in rejoining the company.

Still, the Schulze proposal will be difficult to complete, said Scot Ciccarelli, a retail analyst at RBC Dominion Securities. Mr. Schulze will have a tough time getting equity financing, he predicted. Private equity looks for an exit strategy but with Best Buy’s biggest challenge being the Internet, its pressures may not diminish in coming years. “It’s a hard deal to put together.”

And there are no easy answers to Best Buy’s difficulties, he added. Already, the current executive team is moving to downsize the store base, match Amazon.com’s prices and differentiate itself with services that aren’t available elsewhere.

Best Buy said in a brief statement that its board had received Mr. Schulze’s letter outlining “an unsolicited, highly conditional indication of interest” and “will review and consider the letter in due course.”

The company’s Canadian division, which also consists of Future Shop stores, has outperformed its U.S. parent but the cyber-forces that have weakened the core business also are beginning to eat into the Canadian operations.

In its first quarter, Canadian sales fell in “the high single-digits” at stores open a year or more, Best Buy’s chief financial officer Jim Muehlbauer told analysts in May.

The same-store sales slide “was a result of similar trends as we’ve seen in the U.S., while growth in tablets and mobile phones had less of a positive impact” on those sales than in other divisions.

Mike Pratt, president of Best Buy Canada, said in an e-mail that he has “absolutely no doubt” his operations are heading in the right direction. Last month, he adopted a policy of guaranteeing to beat prices of rivals, including Internet sellers, in a bid to stop consumers from using its stores as a showroom to try out products that they then purchase for less money elsewhere, often online.

“Our approach to online competition and efforts to render show-rooming obsolete in Canada have so far proven successful with some early positive results,” Mr. Pratt said.

Mr. Thomas suggested that Best Buy could take the Canadian model of a dual-brand strategy – running both Future Shop and Best Buy stores – to the United States, possibly acquiring a competitor such as Radio Shack to bolster its U.S. market share.

Industry watchers also said that taking Best Buy private could be a good move for the retailer, taking the heat off of it to produce short-term results and giving Mr. Schulze breathing room to find the right strategy.

Mr. Schulze has the breadth of experience to oversee a creative revival of the operations, said David Ian Gray of retail consultancy DIG360 in Vancouver. But the Best Buy founder would have to operate with a good mix of former executives along with fresh blood to lead a business renewal, Mr. Gray said.

“If all you’re doing is cycling back the people who have been in the current culture, then you’re not going to get it.”

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